It’s a good news/bad news situation at its classic best. Your firm has the ability to receive orders or contracts but you are challenged with restrictions or unavailability of inventory and PO (purchase order) financing. Financing a business based on assets such as inventory and orders in coming has never been more of a challenge in Canada.When we speak to clients we advise there is no one method that seems to handle all inventory and P O finance challenges. But the good news is that via a variety of effective business financing tools you can employ you are in a position to generate working capital and cash flow from these two asset categories. Let’s examine some real world strategies that have made sense for clients.The root of the problem is simply, you have orders and contracts, but those will potentially be lost to a competitor. Conventional wisdom is that you go to your bank and ask for financing to support inventory and purchase orders. As you may have experienced, we aren’t big believers in conventional wisdom on that matter!However, utilizing a convention purchase order funding source does allow you to purchase product and get your suppliers paid, thus facilitating you ability to deliver to your customers.One of the main benefits that many clients don’t realize is that inventory financing and P O financing don’t necessarily require your firm to have a long or strong credit history; the focus on structuring the transaction is around the inventory being financing and the general credit worthiness of your client, who will be paying yourself or the inventory or P O financing firmThe overall process is fairly simply and easy to understand when it comes to putting the transaction together successfully. On receipt of your confirmed purchase order your supplier is paid via cash or a letter of credit. Your firm of course completes final shipment of the product, which typically involves some additional time on your firms part. On shipment and of course payment from your customer the transaction is in effect settled. In a true pure po financing scenario the P O funder is paid immediately on your invoicing of the product. That is facilitated by your firm selling the receivable via a factoring type transaction as soon as you have generated the invoice.There are always limitations to this type of financing – so things we look for early in the transaction are the ultimate remarket ability of your product in case there is a transaction risk. Naturally, as we stated, the overall credit worthiness of your customer is key, his receipt of goods and payment in effect closes the transaction.Inventory financing and PO financing are generally more expensive than traditional financing, due mainly to the significant transaction risk that the lender takes. Therefore we strong recommend that your firm has solid gross margins in the 25% range to cover the associated costs of a po financing, inventory financing transaction that also factors in the time it takes to get paid by your client, as that typically adds 30-60 days on to the whole cycle of the transaction.If there is one great tip of ‘ secret’ that we share with clients its simply that the best method of ensuring financing in the manner we have outlined is to consider an asset based line of credit. Coupled with a facility that will finance your purchase orders this is the ultimate working capital tool that will allow you to grow business quickly and significantly. This type of facility is generally a non bank facility and is offered by independent finance firms.Speak to a trusted, credible and experienced Canadian business financing advisor who will assist you putting together a working capital and cash flow solution that works!
Google Local is a feature of Google that allows you to sell your products and services locally, for free. Because Google is so popular, many people now use it instead of the Yellow Pages to find products and services they are looking for. The reasons are many, but one reason is that Google Local is convenient, and it also offers Google Maps. Customers no longer have to call and get directions; all they have to do is pull up the maps to find you.Another element of this is that you may put the map on your website. This is added convenience for your customer because your customer doesn’t have to go back to Google to find you. They can use the map on your site. Even if you run your business online and work from home, Google Local is still a good choice for promoting your business.For example, if you’re a copywriter, you may offer your services through Google Local for those who are looking for copywriters in their area. Instead of meeting in your home, or wherever you meet, you will meet the client at a place of his/her choice.This gives you a lot of flexibility with your business, as well as opening the door to new customers you may not have considered. Even if you don’t have a website, or an online presence, Google Local is allows you to advertise online for free.Getting started with Google Local is really very easy. The first thing you need to do is to sign up for a Google account. (It’s free.) If you already have one, then go to the Google search engine and type in Google Local. Click on the link and then sign into your account.Add your listing. You want to make your listing as complete as possible. This means including any links to any websites you may own, as well as a complete description of your business. The more complete your profile, the more it will help you drive business to your site.Once you have completed your profile, then Google will give you a choice on how you verify your listing. You may either verify your listing over the phone or through the mail. This part usually takes about two weeks, but once it’s done, your listing goes live.Whether you run your business online or offline, Google Local is an easy way to drive traffic to your business. You don’t need a website, and it will give your offline business a presence online.